Best Fund Managers in India – Types, Qualities of Fund Managers

Best fund managers are like captain of a ship. Imagine what would happen to a ship without a captain to steer it? Or a bus without a driver? The passengers would not reach their destination. The same is true for mutual funds as well. All mutual funds are managed by fund managers who are appointed by the asset management company (AMC). A mutual fund manager is responsible for making investment decisions on behalf of the scheme’s unitholders. They are the care takers of investors’ hard-earned money. So, it’s obvious that we all would want to invest our hard-earned money in funds managed by the best fund managers In India. But who are the top fund managers in 2021? Which schemes are they managing? Have schemes managed by best fund managers outperformed other mutual fund schemes? These are some of the questions that you must ask before you invest in mutual fund. In today’s article we will look at the best fund managers in 2021. We have ranked them on the basis of key parameters like –

Performance track record
Investing strategy
Risk-adjusted returns
Short-term and Long-term performance
Portfolio management style etc.

1. Who is a Fund Manager?

A fund manager is a key person who manages the portfolio of a mutual fund scheme. He manages the corpus collected from lakhs of individuals and invests as per the fund’s objective. An Equity fund manager will buy stocks while a debt fund manager will invest in bonds and debentures. But how does a fund manager decide which stocks or bonds to invest in? This is where the knowledge and expertise of fund managers come into play. A fund manager is an expert in the field of finance. They have years of experience in the stock and capital markets. This helps them steer the fund in the right direction through market ups and downs.

Best fund managers watch the fund’s underlying portfolio like a hawk. They monitor the markets, macro and micro economic trends in order to make informed investment decisions and generate returns for the investors. But remember, a fund manager only manages the fund. He is not an owner of the corpus. The corpus belongs to unitholders only. But fund managers charge fees for managing investors’ money. This is known as expense ratio.

2. What are the Types of Fund Managers?

There are two main types of fund managers –

Active fund managers
Passive fund managers.

As the name suggests, active fund managers actively manage the portfolio and take investment decisions. Their objective is to beat the benchmark returns. They have the freedom to change the funds allocations as per market movements. For example: Mr Neelesh Surana co-manages Mirae Asset Emerging Bluechip Fund. The fund invests 6.17% in ICICI Bank. Suppose he is bullish on ICICI bank and wants to increase the allocation to 8%. Since, he is an active fund manager, he has the freedom to do so. This freedom is not available with a passive fund manager. The aim of a passive fund manager is to mirror the returns generated by the benchmark not beat it. They do not have the freedom to choose stocks or play around with the allocations. They have to copy the benchmark and make changes in line with the benchmark. For example: Kayzad Eghlim is the fund manager of ICICI Prudential Nifty Index Fund. The fund invests 6.42% in ICICI Bank. Suppose even he is bullish on ICICI Bank. Can he increase the fund’s allocation? No, he cannot. Passively managed funds include index funds and exchange traded funds. Historically, actively managed funds have generated superior returns than passively managed funds in India.

3. What Role Does a Fund Manager Play in Managing your Funds?

A fund manager has a plethora of roles and responsibilities. Let us explore the duties of a fund manager. a. Tracking & Monitoring the markets: The primary role of any fund manager is to preserve an investor’s hard-earned money. But they are also responsible for growing and creating wealth. It is a tight walk. But this is where best fund managers stand out. They are able to balance the risk and return expectations of the investors. They do not compromise on safety or growth. To maintain this balance, best fund managers conduct in-depth research before they buy and sell a stock or bond. They evaluate the following:

Market trends
Underlying securities
Conduct due diligence
Analyse current economic scenario
Analysis of various companies and sectors
Monitoring trends in foreign institutional investments
Exercising risk management procedures
Strict adherence to policies set by market regulator.

The fund manager also ensures that the fund is adequately diversified so that risk and return balance is achieved. b. Managing the fund while adhering to regulatory compliance: The Securities and Exchange Board of India (SEBI) is the watchdog of Indian stock markets. It lays down strict rules for fund managers and advisors to protect investors interest. A fund manager must ensure true, transparent and timely reporting as per SEBI. Fund managers are face of a fund house. They have a fiduciary duty towards their investors. Any illegal activity or non-compliance on their part can damage their reputation or goodwill. This affects the funds inflows and growth prospects. So, apart from investment decisions, a fund manager must ensure strict adherence to SEBI’s rules. c. Generating growth: We, as investors, invest in mutual funds to earn good returns. We put our trust and hard-earned money in the hands of the fund manager. He is the key person who decides where and how this pooled money will be invested. Any mistake at this stage can spell doom for your portfolio. But best fund managers are a class apart. They have a track record of generating superior risk-adjusted returns which can beat inflation.

4. What are the Qualities of the Best Fund Managers?

Best fund managers have access to timely information, strategies, trading ideas, and sound investment principles. Their aim is to deliver inflation beating returns for their investors.
Best fund managers are market experts with in-depth knowledge on financial products. They have invaluable experience in portfolio management and strategy which allows them to make informed timely decisions on behalf of investors.
Best fund managers don’t promise what they can’t deliver. They deliver what they promise. Best fund managers are not magicians. They do not paint a rosy picture for attracting higher AUM. Instead, best fund managers constantly improve their research and analysis skills to deliver consistent returns not one hit wonders.
Best fund managers give better returns compared to others but with minimal risk. A good fund manager will not blow up your account. This can be gauged through the funds risk-adjusted returns like Sharpe ratio or Sortino ratio. A good fund manager will take calculated risks.
Best fund managers will define their process and will stick to it. Best fund managers are a by-product of best investment processes. They place emphasis on building a fund’s investment process to avoid personal biases.
Best fund manager will generally churn less. They will not get in and get out of investments too soon unless their mandate requires them to do so.
Best fund managers charge fair fees for managing investors’ funds. The expense ratio charged by mutual funds is relatively lower than fees charged by portfolio management schemes (PMS). Expense ratio has a direct impact on an investor’s return. A high expense ratio eats into your returns. Best fund managers are those that are able to justify their expense ratio with their superior performance.

These are some of the qualities of best fund managers. Let us now look at the list of the best fund managers in 2021. This list has been curated based on the following criteria:

Only actively managed equity mutual fund managers have been considered. Fund managers of Index, thematic, sector, passive and balanced funds are not included in this list.
Schemes with a corpus of Rs 250 crore and above are considered.

Fund managers are ranked as per the five-year annualised returns generated by their fund.

Only funds with buy recommendation on RankMF are included.
Fund managers with minimum two years of qualified experience as lead manager have been included.

After filtering all the qualified fund managers based on the above criteria, the best or top fund managers in 2021 are:

5. Top and Best Fund Managers in India

Fund Manager	Fund House	Qualification	Experience	Scheme managed	Returns	Scheme Performance vs. benchmark
Large Cap:
Prashant Jain	HDFC Mutual Fund	B.Tech (IIT, Kanpur), PGDM (IIM, Bangalore), CFA	22+ years	HDFC Top 100 Fund – Regular Plan – Growth	3 Year: 16.77% 5Year: 15.19%	Beat S&P BSE SENSEX – TRI only once in past 5 years
Mahesh Patil	Aditya Birla Sun Life AMC Limited	B.E. (Electrical), MMS (JBIMS), CFA (ICFAI)	20+ years	Aditya Birla Sun Life Frontline Equity Fund – Growth	3 Year: 13.40% 5Year: 15.04%	Beat NIFTY 50 – TRI only once in past 5 years
Shreyash Devalkar	Axis AMC Limited	Bachelors in Chemical Engineering and PGDM (JBIMS)	16+ years	Axis Bluechip Fund – Growth	3 Year: 15.08% 5Year: 14.79%	Beat NIFTY 50 – TRI every year in past 5 years
Abhijeet Dey	BNP Paribas AMC	B.E.(Mechanical), Masters degree in Management Studies	19+ years	BNP Paribas Large Cap Fund – Growth	3 Year: 10.88%	Beat S&P BSE SENSEX – TRI only once in past 5 years
Swati kulkarni	UTI AMC Limited	B.Com, Masters in Financial Management (NMIMS), CFA, CAIIB	27 years	UTI Mastershare Unit Scheme – Growth Plan	3 Year: 12.86%	Beat S&P BSE 100 only once in past 5 years
Multi Cap:
Anil Shah	Aditya Birla Sun Life AMC Limited	B.Com, C.A., Cost Accountant	25+ years	Aditya Birla Sun Life AMC Limited	3 Year: 16.92% 5 Year: 18.97%	Beat S&P BSE 200 thrice in past 5 years
Anup Upadhyay	SBI Funds Management Pvt. Ltd.	B.Tech (IIT Karagpur), PGDM (IIM Lucknow), CFA	11+ years	SBI Magnum Multicap Fund – Growth	3 Year: 16.92% 5 Year: 18.97%	Beat S&P BSE 500 twice in past 5 years
Harsha Upadhyay	Kotak Mahindra Asset Management Company Limited	B.E Mechancial, PGDM (IIM Lucknow) & CFA	20+ years	Kotak Standard Multicap Fund -Growth	3 Year: 16.25% 5 Year: 18.93%	Beat NIFTY 50 – TRI twice in past 5 years
Neelesh Surana	Mirae Asset Global Investment Management (India) Private Limited	B.E (Mechnaical), M.B.A (Finance)	19+ years	Mirae Asset India Equity Fund – Regular – Growth	3 Year: 17.33% 5 Year: 18.92%	Beat S&P BSE 200 4 times in past 5 years
Anand Radhakrishnan	Franklin Templeton Asset Management (India) Private Limited	B.Tech, PGDM (IIM, Ahmedabad), CFA	20+ years	Franklin India Equity Fund – Growth	3 Year: 12.15% 5 Year: 16.71%	Beat NIFTY 500 twice in past 5 years
Mid Cap:
Pankaj Tibrewal	Kotak Mahindra Asset Management Company Limited	B.Com, Masters degree in Finance (Manchester University, UK)	15+ years	Kotak Emerging Equity Scheme -Growth	3 Year: 15.59% 5 Year: 23.48%	Beat NIFTY midcap 100 every year in past 5 years
R. Janakiraman	Franklin Templeton Asset Management (India) Private Limited	Bachelor of Engineering, PGDM (IIM, Bangalore), CFA	13+ years	Franklin India Prima Fund – Growth	3 Year: 14.42% 5 Year: 21.69%	Beat NIFTY 50 – TRI twice in past 5 years
Pranav Gokhale	Invesco Asset Management Company Pvt. Limited	M.Com, Chartered Accountant	14 years	Invesco India Midcap Fund – Growth	3 Year: 14.31% 5 Year: 21.10%	Beat Nifty Midcap 100 each year for the last 5 years
Vinit Sambre	DSP Investment Managers Private Limited	B.Com, Chartered Accountant	16+ years	DSP Midcap Fund – Regular Plan – Growth	3 Year: 15.54% 5 Year: 21.10%	Beat NIFTY midcap 100 every year in past 5 years
Shreyas Devalkar	Axis Asset Management Company Ltd	Bachelors in Chemical Engineering and PGDM (JBIMS)	16+ years	Axis Mid Cap Fund – Growth Plan	3 Year: 15.08% 5 Year: 20.61%	Beat S&P BSE Mid-Cap thrice in past 5 years
Large & Mid Cap:
Dhimant Shah	Principal Asset Management Company Private Limited	B.Com, ACA	20+ years	Principal Emerging Bluechip Fund Regular Plan Growth	3 Year: 17.73% 5 Year: 22.99%	Beat NIFTY 50 – TRI thrice in past 5 years
Satyabrata Mohanty	Aditya Birla Sun Life AMC Limited	B.Com, C.A., CFA	12+ years	Aditya Birla Sun Life Equity Advantage Fund – Growth-regular Plan	3 Year: 12.90% 5 Year: 17.09%	Beat S&P BSE 200 twice in 5 years
Saurabh Pant	SBI Funds Management Private Limited	B.Com, Masters Degree in Business Economics	11 years	SBI Large & Midcap Fund Regular -Growth	3 Year: 13.60% 5 Year: 16.74%	Beat S&P BSE 200 twice in 5 years
Harsha Upadhyaya	Kotak Mahindra Asset Management Company Limited	B.E Mechancial, PGDM (IIM Lucknow), CFA	20+ years	Kotak Equity Opportunities Fund-growth	3 Year: 15.31% 5 Year: 16.54%	Beat NIFTY 50 – TRI twice in past 5 years
Amit Ganatra	Invesco Asset Management Company Pvt. Limited	B.Com, Chartered Accountant, CFA	15 years	Invesco India Growth Opportunities Fund – Growth	3 Year: 15.77% 5 Year: 16.21%	Beat NIFTY 50 – TRI twice in past 5 years

Disclaimer: Please note that this list is not an indication that readers should invest in the respective funds managed by these managers. We at RankMF do not consider fund managers as a parameter while analysing or ranking mutual funds. Instead RankMF focuses on the quality of the underlying portfolio of stocks and its selection parameters followed by mutual fund managers. It is always good to be informed & aware about who is managing the said mutual fund scheme but never should it be criteria to choose a fund to invest. Investor discretion is advised.

(Source - RankMF as on 23/01/19) Conclusion: There is no doubt that fund managers are important. But they do not determine the success or failure of a fund. This is determined by the stock selection or investment principles followed by the fund. As long as the fund has a sound, tried and tested investment process, investors can sleep peacefully. This helps the fund stay independent of the star fund manager. Afterall, fund managers often shift from one fund to another. This does not mean you too have to jump funds. A star fund manager is a product of a sound investment processes. So, how should you evaluate a fund’s investment process? Simple through RankMF. At RankMF, we analyse more than 20 million data points. RankMF’s proprietary engine objectively and scientifically evaluates all underlying securities and grades them by giving a thumbs up or thumbs down signal. Mutual funds have emerged as one of the best investment avenues in India today. It is a lucrative platform with a potential to transform your hard-earned money into fortune over a period of time. With this, we conclude our discussion on best fund managers in 2021. Open a FREE RankMF account and invest in the best mutual funds of 2021. For more information about investing in mutual funds, stock trading and useful related articles, visit RankMF or our investor education centre.

(Note: This content is for information purpose only. Avoid trading and investing based on the information given above. Before investing in stocks or mutual funds, please conduct proper due diligence).

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